What do we know about ICOs? How can we use them and how can we profit?

Just 10 years ago, almost no one knew about cryptocurrencies or the specialized technologies on the basis of which they were created. This was all deemed part of the IT sector and was hardly considered to be a potential global financial phenomenon. But today cryptocurrencies are being called a trend in investment and even large institutional investors view electronic coins as a very attractive asset for investing large amounts of financial resources. And, of course, it should be said that the impetus for the popularization of cryptocurrencies was the active participation of private investors in financial transactions with these assets – it was the small players that saturated the cryptocurrency market with incredible volumes of real assets and allowed the electronic coin sector to develop as a financial instrument. Active advancement has led to the next evolutionary step in the field of cryptocurrencies – the emergence of such a product as ICO currency. This is the topic that we will devote today’s material to, and we will consider some of the issues that are vital to users and investors – what is an ICO, how does it bring money to issuers and potential investors, and what principles exist for private investors when choosing promising tools for investment with the goal of earning large and quick profits.

What are ICO cryptocurrencies?

Well, the abbreviation ICO stands for Initial Coin Offering which makes for a completely understandable explanation of this innovative financial resource – it is the initial offering of certain electronic coins on a specialized platform in order to obtain real financial means. Usually the goal of such offers is to attract fiat money for the development of a project or idea. Specialists of the investment industry call ICO cryptocurrencies a technological and innovative format of crowdfunding and even consider this mode of raising funds a completely new instrument of exchange trading. Actually, ICOs can be considered a new format of company shares.

ICOs are generally actively used to raise funds for high-tech IT companies and services. And it makes sense, after all, who else would be able to understand the complex technology of blockchain? But we won’t delve into that technological jungle, and instead we will look at how a cryptocurrency ICO works and what actions need to be taken by a potential issuer of such coins in order to interest investors and offer them a completely new and popular product for investment.

To begin with, we need to figure out the basics of how ICOs work for cryptocurrencies. It is relatively simple – blockchain technology, which is the basis for most electronic means of payment, allows you to create new types of coins on your own platform. And this is accessible to absolutely any internet user.

The main advantage of this mode of raising funds for the development and promotion of your own company or project is the simplicity of legal registration, the speed of receiving funds, and the complete absence of regulators. You do not need government permits to issue your own ICO coins, and there is no need to register permits or licenses – it is all quite simple and later we will describe the basic steps of issuing new cryptocurrencies.

The most important condition for the future popularity of your electronic coin is the idea behind the issuing of your coins. If investors see prospects in your project, then raising funds and increasing the value of your cryptocurrency will be a breeze. As a result, both you and your investors will be able to make a profit, which is the main objective of any user who is interested in cryptocurrencies.

So, the potentially successful issuer of a new cryptocurrency needs to take the following steps in order to issue their own electronic money:

Formulate the idea – the issuer of the cryptocurrency needs to develop a completely innovative product, technology or just an interesting idea that will become the basis of a new electronic coin and will attract the largest possible number of users and investors. Among current ICOs you can find some absolutely crazy ideas and products – from new forms of medical care to specialized IT technologies. Therefore, it does not matter what idea you offer the market, the main thing is to interest potential investors.

The announcement – having thoroughly worked out the technology or idea, you, as the initiator of this electronic currency, must first present your product before offering the tokens. This will not only move you to the next step of the offering, but also help you evaluate the initial interest of users to your idea. Usually this stage takes place in the form of advertising on a relatively advanced internet resource. It is generally recommended to promote your announcement on popular social networks or instant messengers.

The offer – this is, perhaps, the only issue that is tied to the legal side of issuing tokens. The thing is that despite the lack of regulation in this area, ICO cryptocurrencies are a form of investment contract. Therefore, as we debunk the myth of the free market for ICO coins, we see that in order to issue tokens, the project that you are promoting needs to have the status of a legal entity which will act as the company making the offer. For such purposes, the initiator of the coin issuing usually develops a specialized website that can be used as the means for announcing the idea.

Promotion of the project – advertising! In order to attract the maximum number of investors at the initial stage of the token offer, you need to promote it in an informational space – for this, there is nothing better than advertising. Issuers often resort to the most aggressive methods of marketing in order to maximize the audience for their new ICO project. And, of course, the emphasis is always on the prospects of profiting and announcing the release date of the tokens.

Token sales – this is the direct release of the tokens into free circulation. Usually sales of electronic coins start on the platform of the cryptocurrency itself and can then be offered on special online exchange platforms. We should note that the appearance of a coin on a crypto exchange is an investor-motivating factor, since it signals a high level of financial viability of the token. Moreover, it should also be noted that today large exchange platforms have begun to offer specialized sections where it is possible to conduct token sales of new ICO cryptocurrencies. As you can see, in order to potentially become successful in the crypto industry or to promote your own interesting idea or product, you only need to go through a few stages.

To sum up, an ICO is an innovative method of attracting investment funds through the issuing of new types of cryptocurrencies. It’s time to talk about how the private investor can use ICO cryptocurrencies to make a profit.

How to use it and how to make profit?

After seeing the success of investment pioneers on the cryptocurrency market, many users today strive to repeat their successes. You yourself most likely, to put it mildly, deeply regret not buying Bitcoin on its ICO in 2009, when the coin was worth a fraction of a cent. Yes, some people have earned billions, but even today you can find token sales which have earned fantastic amounts of profit for users, and here are just a few simple examples:

⇒ Stratis – ICO 2016, return on initial investment of 79,000%

⇒ Spectrocoin – ICO 2017, an increase in the token’s value of more than 18,000%

⇒ ARK – ICO 2016, growth of 9,000%

These are absolutely real figures which can be confirmed on crypto exchanges. We should note that the initial value of these tokens was that same fraction of a cent and this made electronic coins affordable to any private investor. Users who carefully considered the prospects of these products received excellent financial results and were able to become financially successful. But how did they know to buy those coins rather than the ones that aren’t worth anything today? This is exactly the question that interests the majority of users, and we will now offer recommendations on choosing ICO coins with high financial prospects.

So, in order to find a prospective cryptocurrency for future profitable investing, you need to pay attention to the following factors:

⇒ What is the idea for the new token, what is the innovation and interest? Moreover, evaluate your own feelings about this product as a user and try to learn how other people react to this idea. An excellent option is to select a new technology that will solve some global problem or issue.

⇒ The format of using blockchain technology. The thing is that new forms of using this technology are what really interest large investment institutions, therefore such products often become growth leaders

⇒ Consider the stage of product development — if it is only a theory, then investors won’t be very willing to invest, and the opposite is true for a token for which there is a prototype or a finished product ready for promotion. Therefore, we choose those ICO cryptocurrencies that are collecting funds to promote a finished product

What format of profit-making does the cryptocurrency offer — in this case there are several options:

– The subsequent buyback of the coins by the issuer – Classic dividends on tokens – The use of the coins as a means of payment using a special service – Profit from an increase in the value of the tokens and their sale on the exchange market

Here, the choice is entirely up to the investor, but it should be noted that the last type of generating profit is recommended only for short-term investments, since it has the highest level of financial risk.

What is the total issue of coins? In other words, how many tokens does the project want to issue to raise funds, if they have such a limit, that is. In this respect, it is recommended that you select an ICO with a finite limit for the release of tokens and a small total number of coins. It is extremely simple: the less of the cryptocurrency there is, the higher the demand will be for it, and the higher its value and rate of profit growth.

The ultimate financial goal of the project – if the issuer initially sets unrealistic goals for the project in the billions or hundreds of millions of dollars, then there is little hope that they will be able to achieve their goal and become successful. The second point is how the money will be spent – pay attention to the token share for the project costs and the amount of coins that will remain with the issuer. If the reserve coins remain with the developers of the idea, then this is a project created only to raise funds, after which the initiators of the ICO will simply throw their tokens into the free market and bring down their value, and the investors will lose money.

How to get out of the project – in simple terms, how to sell the coins and to whom (not taking into account the possibility of selling the cryptocurrency on the free market)

If you correctly and accurately answer the questions above and clearly follow these recommendations, you will be able to choose a cryptocurrency for yourself that can very quickly bring absolutely amazing profit on a minimal starting investment. This is how professional investors on the cryptocurrency market find prospective financially profitable projects for capital investment.

In conclusion

We currently know quite a bit about ICOs and this enables us to look at new forms of investing and raising funds without skepticism. Of course, ICOs have opened up many opportunities for potentially successful projects, but at the same time, cryptocurrencies have made it possible for ordinary investors to earn on minimum investments.

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